FDIC Quarterly

The FDIC Quarterly provides a comprehensive summary of the most current financial results for the banking industry, along with feature articles. These articles range from timely analysis of economic and banking trends at the national and regional level that may affect the risk exposure of FDIC-insured institutions to research on issues affecting the banking system and the development of regulatory policy. The FDIC Quarterly brings together data and analysis that were previously available through three retired publications -- the FDIC Outlook, the FDIC Banking Review, and the FYI: An Update on Emerging Issues in Banking. Past issues of these publications are archived under their original publication names.

FDIC-insured commercial banks and savings institutions reported net income of $28.7 billion for third quarter 2007, the lowest quarterly total since fourth quarter 2002. Quarterly loan loss provisions soared to a 20-year high, and market-related noninterest revenues declined. The average return-on-assets fell to 0.92 percent, the lowest quarterly average since fourth quarter 1992.

The combination of weakening in mortgage credit quality, upward pricing of hybrid adjustable-rate mortgages, falling home prices, and fewer refinancing options highlights the need to find a workable solution to current problems in the U.S. subprime mortgage market. This article describes a systematic and streamlined approach to loan modification that will help avert foreclosure for certain subprime borrowers who cannot afford to continue making mortgage payments when interest rates reset. The article also addresses common misconceptions about this approach.Printable Version - PDF 299k (PDF Help)

The Federal Deposit Insurance Reform Conforming Amendments Act of 2005 required the FDIC to study the feasibility of establishing a voluntary deposit insurance system for deposits in excess of the maximum amount of FDIC insurance. The study results were delivered to Congress in early 2006. This article describes market changes that have reduced the demand for excess deposit insurance and provided depositors with other options to protect excess deposits. However, if Congress were to decide the FDIC should play a role in providing excess deposit insurance, the article examines two possible approaches available to the Corporation. Printable Version - PDF (PDF Help)